For now at least it is ok to update. Especially if you play imports as their updates will only activate if you don't have an updated system and those will cause problems. Also be sure to grab the browser while it is free.
There is no Wii homebrew and won't be until we get a true modchip or a software exploit. Right now it and the 360 are simply drive mods that only allow perfect copies. There are some browser based apps like flash games and a media center, but their pretty mediocre (15 FPS on video pshhh).
The exception is that Gamecube homebrew works as long as you can convince the system it's a legit disk, which isn't hard as the contents aren't encrypted. No streaming of course since there is no GC BBA.
Gamecube homebrew is the usual fare like emus N64 and below (not PS1), media players, etc. Nothing an XBox can't do better.